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Crude bounces above $80 on storm fears



By Upstream staff 

US crude futures ended back above $80 in a late, technically inspired bounce after falling sharply today on a surprise inventory increase.

Some traders cited concern over a tropical depression that is gathering strength and which may hit Mexican oil production in the Gulf of Mexico as supportive.

Gasoline futures pared losses while heating oil futures ramped up to the plus side, after sliding earlier on data showing inventories rose last week.

"Everybody seems to have been caught by surprise by the crude stock build, but now people are watching a tropical depression that will be named Lorenzo when it becomes a tropical storm," said Phil Flynn, analyst at Alaron Trading in Chicago.

On the New York Mercantile Exchange (Nymex), November crude settled up 77 cents, or 1%, at $80.30 a barrel, trading from $78.44, lowest since 17 September's $78.25, to $80.82, Reuters reported.

October heating oil ended 0.13 cent, or 0.06%, higher at $2.1826 a gallon, trading from $2.1465 to $2.2121.

October RBOB finished 1.05 cents off, or 0.5%, at $2.0274 a gallon, trading from $1.9875, the lowest since 12 September's $1.9664 low, to $2.067.

In London, November Brent crude settled down 19 cents, or 0.2%, at $77.43 a barrel, trading $76.36 to $78.29.

US crude stocks are up for the first time in five weeks, rising 1.8 million barrels to 320.6 million barrels last week as imports jumped and refinery utilisation slumped 2.7 percentage points to 86.9% of capacity, the US Energy Information Administration said today.

Gasoline stocks increased 600,000 barrels to 191.4 million barrels, up for the second week running.

Distillate stocks, which include heating oil and diesel fuel, rose for the 10th consecutive week, by 1.6 million barrels to 137.1 million barrels, as output and imports rose.

Despite Tropical Storm Karen gaining strength and a tropical depression spinning in the Gulf of Mexico, no storms currently threaten US oil and natural gas production in the northern Gulf of Mexico, the US National Hurricane Centre (NHC) said.

But Tropical Depression 13, which is close to tropical storm strength, could disrupt operations in Mexico’s Cantarell oil complex in the Bay of Campeche in the south-western part of the Gulf, the NHC said.


Wednesday, 26 September, 2007, 21:06 GMT  | last updated: Wednesday, 26 September, 2007, 21:06 GMT

Topped up: US crude prices initially fell on a surprise bid in crude stocks
 

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